Reference no: EM133723528
Step 1: Setting Up the Environment
Firstly, check if Python and the necessary libraries are installed and available to be imported. He has given the following commands to install the libraries:
Step 2: Importing the Libraries
To start, the appropriate libraries should be imported:
Step 3: Loading the Financial Data
When using pandas, the next step would be to load financial data into a pandas frame. In this case, our raw data will be a CSV file that holds information about revenues and expenses by quarters.
Step 4: Data Cleaning and Preparation
Make sure that the data is free from errors and put in the right form, as required. It is also good practice to check for missing values and then either remove them, impute them or ignore them depending on the situation:
The first step involves converting the date columns to Date Time format and setting the index:
Step 5: Data Manipulation with Pandas
Key financial measures that should be computed include gross profit and net profit:
It is easier to analyze performance by year to group it by year:
Step 6: Numerical Analysis with NumPy
Confidence interval and statistical measures such as mean, median, and standard deviation:
Step 7: Data Visualization with Matplotlib and Seaborn
It recommends the use of line plots and bar charts to present the quarterly, as well as the annual financial position:
Visualize the annual performance:
Seaborn should then be used to generate a correlation heatmap that will help to compare relations of different financial ratios: